Coke

"If you want to understand human behaviour, logic can tell you a certain amount. For example, if you put the price down people would probably buy more of what you are selling. If you’re running a pub and it smells of piss, people probably won’t go there. That’s something you don’t need to research, you know that by and large logic will say that it’s not a good idea, okay? Then there’s the information market research can tell you, you know, asking people whether they’d prefer your pub to smell of urine or not? Those are questions which people will answer fairly honestly, you know, they’d rather buy this than that because they think it looks nicer. Research is not all total rubbish, I mean, you know, people do have some access to their thoughts and feelings and they can occasionally describe their behaviour with a degree of accuracy. But then there’s this other thing which is what I call the missing third. It’s probably more like the missing half in terms of human behaviour in truth, it’s the influences on behaviour that logic won’t tell you and research won’t tell you. I’ll give you an example of that. Take Red Bull. My theory asks how can they charge £1.50 for a can of Red Bull, when Coke only costs 50p? In a way they succeeded because they made the can smaller … people recognise that it’s not a Coke can, it’s a small can, therefore this must be a different kind of drink from Coke so maybe there’s a reason why it charges £1.50 rather than 50p. Now the interesting thing is logic’s not going to tell you that. No one’s going to suggest that in order to be able to charge £1.50 for this you have to make the can smaller. No consumer research group is going to say: “I’m not paying £1.50 for that mate, but I would if you gave me less of it.” No one’s ever going to say that. But the truth of the matter is that that’s how the brain works sometimes."

"Andy Warhol’s beautiful insightful comment: “What I like about Coke is that the President of the United States can’t get a better Coke than the bum on the street.”"

"Benefit. A business with Branding is able to charge a higher price for its offering due to one or both of these two reasons: Affective valence. The built-up associations with the brand elicit good feelings about the offering, distinct from the objective value of the good. For example, Safeway’s cola may be indistinguishable from Coke’s in a blind taste test, but even after revealing the result, the taste tester remains willing to pay more for Coke. Uncertainty reduction. A customer attains “peace of mind” knowing that the branded product will be as just as expected. Consider another example: Bayer aspirin. Search for aspirin on Amazon.com and you will see a 200 count of Bayer 325 mg. aspirin for $9.47 side-by-side with a 500 count of Kirkland 325 mg. aspirin for $10.93. So Bayer has a price per tablet premium of 117%. Some customers still would prefer the Bayer because of diminished uncertainty: Bayer’s long history of consistency makes customers more confident that they are getting exactly what they want. Note that the Benefit from Branding does not depend on prior ownership, as with Switching Costs."

"“On my first day of work, I had to sit on a case of Coke in a dusty basement.” But despite all that, he was happy. It was the happiness that comes with believing you’re a part of the very beginning of something big. His confidence was inspired by Alain Bouchard, he says, his charisma and his passion for work."